FEA are suspended from the ASX not because they’re in the midst of discussions with their bankers, but because they are in breach of ASX listing requirements.

They are yet to file their half yearly report due by the end of February 2010.

FEA are currently insolvent because the banks intend to test their loan covenants by using the yet to be released results.

They’ve now been in breach of banking covenants for 9 months.

The banks chose not to apply the tests to the 2009 results, giving FEA time to restructure.

FEA had the benefit of watching Great Southern and Timbercorp being mauled by their bankers in their dying days.

They must have missed the lesson.

Perhaps another case of history repeating itself because no one was listening the first time.

It seems the penny may also have finally dropped for Gunns given their belated restructure proposals..

The Examiner reported on 4th March that “a Government rescue package is being developed to assist Forest Enterprises Australia in the same way as a $12 million low-interest loan saved King Island’s abattoir from closure last year”.

But even the Premier Mr. Bartlett, imbued with a humble self assessed prescience in matters forestry (he recently described his opponents as clueless) is now believed to be against creating a world first by giving a loan to an insolvent Company.

Press reports highlight that FEA is suspended from the ASX not on the more salient question of whether they’re trading whilst insolvent, and the consequences that may flow.

Is FEA continuing to trade? Does this mean the Directors are personally liable for undertakings henceforth made by FEA?

Is FEA continuing to take supplies of radiata from the FT/GMO joint venture for their Bell Bay sawmill?

If so, has Mr. Bartlett given any undertakings to the Directors of FEA that they will not be liable to pay for the logs in the event of FEA’s default?

The Liberal Party has promised to do what it can to protect workers’ jobs.

Posted by Factsearcher on 08/03/10 at 02:58 PM

The same questions could be asked of Gunns. If Gunns owes the Tasmanian Government 20 million plus for unpaid timber and road works, then i can’t see how they made a profit. If you owe more money than you earned shouldn’t the amount owed be declared so that share holders can make an informed decision.

Posted by max on 08/03/10 at 05:09 PM

One wonders how the Tasmanian Labor government can continue to fund the unsustainable forestry industry, then too, we must also wonder what becomes of the FEA trading revenues?
I am of the opinion that since the Liberal government allowed or even encouraged Senator Eric Abetz to go on a spieling spree talking up the forestry industry in Tasmania, during his time as the minister for forests, he was in fact failing the people of Tasmania if not the entire of Australia?
This tarted up support by the Senator during his time as the forests minister has since been proven an almighty failure, not unlike the blessings he bestowed upon the MIS investment strategies.
Many of us would have thought that the Senator would come forward on this matter, to finally dispel the myths he had cast upon the people as the indisputable true facts?
Currently this same Senator has been described as the mighty power-broker of the Liberals in Tasmania, if so, I hold misgivings for the future survival of the Liberal Party in Australia.

Posted by William Boeder on 08/03/10 at 06:27 PM

The Examiner reported on 4th March that “a Government rescue package is being developed to assist Forest Enterprises Australia in the same way as a $12 million low-interest loan saved King Island’s abattoir from closure last year”.

FEA shares were suspended last week when the company missed a deadline to reorganise its $216 million debt.

What is the ‘low-interest’ repayment on a $216 Million loan? Can Bartlett find this amount of money and from where, and what will the Tasmanians have to sacrifice to bail out this bankrupt company? To fund the $6.5 Million fox task force he had to take the money from the Mount Lyall restoration fund!

Gunns owns 13.5% of the company, so will they benefit if this bailout happens?

If they don’t bailout the company and there is the additional Workers Compensation ($20M ?) claims to add in, will that also appear as a loss/bad debt on Gunns books. (13.5% x ($216M + $20M)) = $28.08M write-down. Doesn’t leave much out of their declared profits of $400K, does it?

I wonder if Bartlett is going to change his election manifesto?

Friends

“We are paying out $236 million to save 300 jobs in FEA. Unfortunately this means we will have to scrap the Education Reform plan and you will only be getting half a New Hobart Hospital…..”

We live in interesting times!

Posted by Gerry Mander on 09/03/10 at 05:30 PM

Didn’t see this dedication to saving jobs when ACL were involved.
ACL was/is an employer and trainer of locals. Exporting products, bringing money into the state to be spent locally. Not much Government largesse around when they were in trouble?

Posted by Steve on 09/03/10 at 06:56 PM

With the massive downturn and failures now apparent in Tasmania’s forestry industry, what becomes of the money needed by Forestry Tasmania in meeting the huge amount of executive salaries each pay period?

How can this top heavy executive payroll continue to be levied upon the taxpayers, particularly if there is no recognizable revenue being generated?

This entire matter of forestry has run completely out of sane credibility, particularly so when based on what news has been made available to the public and from that portion of information as made available to us from the ASX.
I don’t believe the Tasmanian Treasury can withstand much more of the generous subsidation that is being sought by each of these still seemingly viable timber industry entities?

What now becomes the futures of all the employees of Gunns Ltd and Forestry Tasmania that are being denied their promised full-time employment?

I cannot comprehend how this GBE of the Tasmanian State Labor government can continue to report as fact all the operational figures and revenues, assets and liabilities, then of the properly determined future of Forestry Tasmania.

Forestry Tasmania seems to just plod along like an old log jinker, no apparent accountability to the government in any respects, other than gilded promises of just you wait and see?
Do Forestry Tasmania count as assets, the Ancient Forests they have yet to plunder and pillage?

Do all of the handshake agreements and promises made in this business, ever deliver any benefits whatsoever to the Tasmanian people?

So who really is the beneficiary of all this heavily subsidised Ancient Forest and Old Growth clear-felling engagements?
Some person or group of persons, can be the only seemingly logical answer to this question, but who really is it, or, who are they?